COVID-19 | The Fed­er­al Court rules on per­son­al leave dur­ing stand down

In the deci­sion Com­mu­ni­ca­tions, Elec­tri­cal, Elec­tron­ic, Ener­gy, Infor­ma­tion, Postal, Plumb­ing and Allied Ser­vices Union of Aus­tralia v Qan­tas Air­ways Lim­it­ed [2020] FCA 656, hand­ed down on 18 May 2020, Jus­tice Flick of the Fed­er­al Court ruled that employ­ees are not enti­tled to access paid personal/​carer’s leave or com­pas­sion­ate leave dur­ing a peri­od in which they are stood down pur­suant to sec­tion 524 of the Fair Work Act (Act).

This case con­sid­ered two union appli­ca­tions which claimed that Qan­tas was required to con­tin­ue to pro­vide access to paid per­son­al and car­er’s leave for employ­ees who had been stood down pur­suant to sec­tion 524 of the Act (due to the COVID-19 pandemic). 

In his judg­ment, Jus­tice Flick exam­ined the rela­tion­ship between two rights in the Act: the right of employ­ers to stand down employ­ees, and the right of employ­ees to access personal/​carer’s leave or com­pas­sion­ate leave. 

In dis­miss­ing the union appli­ca­tions, Jus­tice Flick not­ed that the paid personal/​carer’s leave enti­tle­ment con­ferred by sec­tion 96 of the Fair Work Act was a ​“form of income pro­tec­tion”. Ulti­mate­ly, employ­ees who have been stood down are not earn­ing the income which these enti­tle­ments are designed to pro­tect. Jus­tice Flick stat­ed [at (31)]:

“[…] at the very heart of the ulti­mate con­clu­sion, name­ly that an employ­ee can­not access such leave enti­tle­ments whilst stood down, is the deter­mi­na­tion that such leave enti­tle­ments are an enti­tle­ment on the part of the employ­ee to take leave from oth­er­wise per­form­ing the work they are required to per­form. It is the very char­ac­ter­i­sa­tion of the leave enti­tle­ment con­ferred by s 96 as a ​‘form of income pro­tec­tion’ which pre­sup­pos­es that an employ­ee is in receipt of income. As Qan­tas has repeat­ed­ly sub­mit­ted, and cor­rect­ly so, ​‘income is not being pro­tect­ed if there is no avail­able or required work from which to derive income in the first place’.”

Jus­tice Flick con­tin­ued (at [35]):

“In cir­cum­stances where an employ­ee has been law­ful­ly stood down, and thus in cir­cum­stances where there is no work which the employ­ee can per­form and there­by derive income, an employ­ee is not enti­tled to access the leave enti­tle­ments con­ferred by ss 96 or 105. To enable the employ­ee to do so would go against the very object and pur­pose of con­fer­ring those enti­tle­ments – name­ly an enti­tle­ment to be relieved from the work which the employ­ee was oth­er­wise required to per­form. If there is no work avail­able to be per­formed by the employ­ee, there is no income and no pro­tec­tion against that which has not been lost. Con­verse­ly, to expose the employ­er to a lia­bil­i­ty to pay leave enti­tle­ments after law­ful­ly hav­ing invoked the pow­er to stand down an employ­ee would defeat one of the two prin­ci­pal pur­pos­es of stand­ing the employ­ee down – name­ly, to pro­tect the employ­er against such claims.”

Although this deci­sion arose in rela­tion to a dis­pute between Qan­tas and its employ­ees – and not­ing that many Qan­tas employ­ees are cov­ered by an enter­prise agree­ment (the stand down terms of which did not affect the out­come in this case) – it is expect­ed that this deci­sion will have sig­nif­i­cant ram­i­fi­ca­tions for the many employ­ees in oth­er indus­tries across Aus­tralia who have been stood down under the Act due to the COVID-19 pandemic. 

Notably, although this deci­sion pro­vides that there is no legal oblig­a­tion for employ­ers to enable employ­ees who are stood down to access personal/​carer’s leave or com­pas­sion­ate leave enti­tle­ments, employ­ers can still elect to pro­vide access to these entitlements. 

At the time of writ­ing, the TMU has indi­cat­ed an inten­tion to appeal. If that appeal pro­ceeds it will be a case to fol­low with interest.